By Getrude Matayo
Botswana based retailer Choppies owed local banks and suppliers 1.2 billion shillings regulatory filings show, which it tried to settle through inventory sales before exiting the Kenyan market
According to the retailer, the fire sale of assets last year realized 657 million shillings shrinking the values of its moveable assets from 753 million shillings in 2019 to 136 million shillings as of June 30th, 2020.
The retailer which is now defunded in Kenya, however, said that local shareholders would take over 25 percent of its debt which 312 million shillings.
Parin Bharatkumar Patel and Birju Pradipkumar Patel are the two directors of the Export Trading Group (ETG) which sold Ukwala Supermarket to Choppies and became partners in a joint venture.
In July 2019, the retailer reveals it obtained at a 250 million shillings overdraft facility from I&M Kenya to finance working capital over a five-month period, a facility guaranteed by Shanta Retail Holding- a minority shareholder in the chain.
A month later, the retailer would tap an additional 430 million facility from the minority shareholder before opting out of the local scene in October
The Botswana owners have also committed to personally pay 72 million Botswana Pula which is 682 million if further Kenya debts materialized.
The company said that all the stores except the equipment of one store were disposed of during the financial year and the realized amounts have been used to settle the liabilities.
Choppies Enterprise Kenya Limited and Choppies Distribution Kenya Limited closed with the potential liability of 1.2 billion to which 25 percent of the amount will be borne by the local shareholders. The remaining formalities will be completed in 2021.
According to the company, it had taken a loan of 300 million shillings from Absa Bank Kenya, which had been used to expand its footprint that stood at 12 stores in Nairobi, six branches in Kisumu city, and eight other spread across major towns including Kisii and Kericho before its collapse.
The retailer whose entry into Kenya was through the sale of defunct Ukwala in 2015 ended in a similar fate as it ceded the control of branches to its rivals among them Quickmart which has taken the majority of its branches in Nairobi’s Business District
The retailers’ payments for the three-year bank loan at an interest rate of 17.7 percent were supposed to kick in August this year. The money was however secured by a corporate guarantee provided by Choppies Enterprise Land and Moveable assets.